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Falcon Corporation
11023
Information pertaining to the Falcon corporation's budget for the year 2001 is presented below. Falcon produces one product using one type of raw material. All labor costs are paid in the quarter of production. The company has no debt and uses the LIFO method for inventory costing.
Falcon Corporation Account balances on December 31 2000
Accounts receivable (Net) Raw materials Finished goods Accounts payable Taxes payable
Desired end-of-quarter balances
900 lbs. 200 units
$ 107,000 $ 4,500 $ 30,000 $ 2,000 $ 2,000
Raw Materials as a fraction of following quarter's production needs Finished goods as a fraction of following quarter's sales
Unit manufacturing costs Needed Unit Price
0.50 0.25
Total
Material lbs. at price 2 lbs/unit Direct Labor Hours at rate 4 hrs/unit Variable Overhead 4 hrs/unit Total unit variable manufacturing cost Unit Selling Price
$ 5.00 $ 15.00 $ 12.00
$ $ $ $ $ $ $ $ $
10 60 48 118 210 24,000 6,000 10,000 37.00 30% 75% 25% 30% 70% 1,200
Fixed factory overhead per quarter excluding depreciation (cash) Depreciation for machines used in production (per quarter) Selling and administrative expense (cash): Fixed Expenses per quarter: Variable cost per unit sold: Income tax rate (Taxes paid in cash in the following quarter) Portion of purchases paid: In Purchased Quarter: In next quarter: Portion of Sales collected: In Quarter of Sale: In next quarter: Unit Sales Forecast: for 2001 1st quarter: 3rd Quarter: 800 800 2nd Quarter:
Prepare the following tables Production budget, 2001
Quarter : 1
Quarter: 2
1
Units to be produced
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Raw Materials budget
Falcon Corporation
Quarter 1, 2001
2 3
Cost of purchased materials Increase in Accounts receivable
4
Increase in Accounts payable
5
Unit product cost of goods manufactured in quarter 1, 2001
Income Statement
Quarter 1, 2001
6
Net Income
Quarter 1, 2001
Cash Flow Statement
7
Cash flow from operations